Capt. James E. Montandon, acting assistant quartermaster, at Johnsonville, reports as follows:

Lieutenant King, commanding, on the 4^th instant called to see me and invited me to go down the river on the Key West. I went with him. Six miles below this place we came on the gun-boat Undine, in the hands of the rebels, also the transport Venus, in their hands. As soon as they discovered us they ran around the point and disappeared. We ran down to the point, came in sight, and opened fire on them, capturing the Venus with 2 rifled 20-pounders, and towed her to Johnsonville, the Undine escaping. While running up to Johnsonville a rebel battery opened on the Key West, putting nineteen shots through her before she could be got out of range. She was greatly disabled and returned to Johnsonville. I arrived here at about 2 p.m., and was put in command of 550 Government employees, and directed to put them in the intrenchments. Our battery was firing over the left of the line, where my employees were stationed, one of the 20-pounder guns going off and killing twenty of the mules in the corral near where the employees were stationed, completely demoralizing them, and causing them to stampede immediately. About this time the gun-boats were set on fire, and Captain Howland told me that he had ordered the transports to be burned.